Make check for $250 payable to Apple Computers
I know how it feels. Bottom of the screen stopped working after the 1.4 software update, brought it into the Apple Store, Genius says there is sign of "wear"(had the thing since launch). Apple wouldn't repair the thing so they made me pay $250 if I wanted a new phone. Having no other choice(need to have a phone), I paid it. But I also made a choice of filling a complaint with the state attorney general and suing Apple in small claims court.